There's a few reasons for utilizing this method:
- You'll end up with a juicier meatball, as it is cooked in liquid.
- It'll be rounder and more plump because it was cooked in a liquid.
- You'll be 100% sure that it was cooked thoroughly without being burned.
The reason for the pan browning is just a reverse sear - purely for color/crunchiness and perhaps some flavor from a browned meat and the butter.